2017-03-01 00:00:00 Running a Business English Learn what the Six Sigma methodology is and discover some of the many reasons it is a powerful and useful concept for businesses. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Project-Manager-Uses-Six-Sigma-Methods-To-Break-Down-And-Analyze-A-Task.jpg https://quickbooks.intuit.com/ca/resources/business/business-benefits-six-sigma/ Business Benefits of Six Sigma

Business Benefits of Six Sigma

4 min read

When you run a small business, you know that efficiency can help you save money and boost productivity. That’s where Six Sigma can come in handy — this group of techniques and tools can help you improve your operations. You can use this approach in any industry to reduce waste, eliminate product defects, and create a more predictable process.

Benefits of Six Sigma for Businesses

One main goal of Six Sigma is to help you create higher-quality products with fewer defects. When you use the Six Sigma tools, you can reduce variation and create a more predictable process. Fewer problems make your customers more satisfied, which leads to improved customer loyalty. These repeat buyers can create a stable, profitable foundation for your company and even refer others to your business.

Six Sigma also impacts your employees. It helps your staff with time management, helping them become more efficient and productive. That means that your product cycle times get shorter, since employees learn to analyze data and find problems in their early stages. At the same time, your managers learn to determine what aspects of your business require the most attention, which improves your strategic planning.

Understanding Two Important Six Sigma Strategies

How does Six Sigma help your company reduce the standard deviation in your products? It uses a set of strategies that focus on measuring different parts of your process. Two of these strategies are called “define, measure, analyze, improve, and control” (DMAIC) and “define, measure, analyze, design, and verify” (DMADV). DMAIC helps you improve your existing business operations. DMADV helps you develop new processes that can create higher quality standards.

How Do You Use Six Sigma Strategies?

Six Sigma strategies are very specific — each one comes with a set of steps that walk you through the process. Imagine you want to use DMAIC to solve a problem in one of your existing projects. You’d work through each step as follows:

  • Define: Define the exact problem you want to solve.
  • Measure: Collect as much data as possible about the problem, from every aspect.
  • Analyze: Analyze the data to hone in on the problem’s cause.
  • Improve: Decide how you can solve the problem, and make those changes to improve your process.
  • Control: Keep an eye on the process to make sure your new changes work.

What if you want to create something new in your business? You might want to launch a new product, for example, or create a new customer service process. Here, you’d use DMADV:

  • Define: Define the goals you want to achieve with the project.
  • Measure: Identify the resources you need to complete the project, and list the risks.
  • Analyze: Come up with multiple solutions and test each one on your customers.
  • Design: Pick the best solution based on your customers’ needs and feedback.
  • Verify: Confirm that your solution meets the goals of the project on a regular basis.

Does Your Business Need Six Sigma?

Six Sigma has extremely high quality standards. It measures defects per million opportunities (DPMO) — the number of defects for every 1 million products you make. If you use the strategies correctly, you can reduce your DPMO to 3.4. But how do you know if you need Six Sigma? You can figure it out by comparing your company’s current DPMO to the Six Sigma quality standards.

Let’s say your company makes pencils, and you know your product has five defect-prone elements — the wood, graphite, eraser, eraser holder, and logo imprint. This means that every time you make 100 pencils, you have 500 potential defects. Currently, your manufacturing line produces four defective pencils for every 100 pencils. This means you have a defect rate of 4/500 — four defects out of a possible 500. To calculate DPMO, you’d calculate (4 / 500) x 1 million = 8,000. Compared to the Six Sigma 3.4 DPMO, your 8,000 DPMO sits very high. That means you could benefit from Six Sigma strategies.

Getting the Six Sigma Certification

To get the Six Sigma benefits, you need to get certified, and you can choose from a variety of methods and programs. Usually, when you sign up for a program, a Six Sigma consultant helps you implement the strategies in your company. This professional oversees the process and gives you guidance. As you go through the Six Sigma program, you earn different belt colors. As in martial arts, your belt color explains your experience, knowledge, and training. These include:

  • White belts: White belts understand the basic ideas of Six Sigma and can work on problem-solving teams. They can also provide support for Six Sigma projects, but they’re not ready to join your actual Six Sigma team.
  • Yellow belts: Yellow belts can participate in a project team at the lowest level. They review items that support the project as a whole.
  • Green belts: Green belts collect data and help analyze it. They support black belts and can lead teams of green and/or yellow belts.
  • Black belts: Black belts have the highest level of experience. They lead Six Sigma teams to solve problems in projects.

If you have enough employees, you can train them in Six Sigma. Then, you can have a team that works constantly to improve your company. Every Six Sigma team also has a master black belt. If you wear the master black belt, you lead the entire project. This means that it’s up to you to come up with key metrics and choose a strategy for the project.

When you need to improve your business and your products, Six Sigma offers one excellent option. Six Sigma methods can boost quality and make your entire business more efficient over time. As you choose Six Sigma qualification courses, it’s a good idea to get the rest of your business on track, especially the financial aspects. Keep in mind that the QuickBooks Self-Employed app helps freelancers, contractors, and sole proprietors track and manage their businesses on the go. Download the app today to see how it can improve your small business.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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